Answer: When the government says it’s not.
Water privatisation is on the agenda with the tabling in the House yesterday of Rodney Hide’s local government amendment bill.
The bill will allow private companies to own water infrastructure (dams, pipelines, treatment plans, you name it) for up to 35 years. Although curiously the bill’s explanatory notes and the Government’s press statement explains this is not privatisation. Yeah right!
If 35 years isn’t privatisation, how long would a dam have to be in private ownership before the Government conceded it was privatisation? 50? 100? Help me out here.
The provisions are designed to encourage public private partnerships (PPPs) which internationally have become the favoured mechanism for privatisation of municipal water in recent years. And in particular BOOT schemes (Build, Own, Operate and Transfer). The Local Government Act 2002 limits contracting out of water services to a period of 15 years and prohibits private ownership of municipal water infrastructure – both those will go under Hide’s bill.
Hide says the current provisions in the Local Government Act prohibiting the sale of Council water assets still apply. They would continue to apply to existing assets but not to new ones built under the new regime.
Alongside the desire to open up municipal water to private control, is another provision which would repeal the current obligation of councils to consult the public before contracting out public services to the private sector.
The Prime Minister stands up in Parliament and says “there is no privatisation agenda” as he did this week. But his Government is removing the democratic safeguards against privatisation of local government assets. The other example currently before the House is the third super city bill’s repeal of the requirement for a majority approval in a binding referendum before the Ports of Auckland can be sold.
Put the privatisation and contracting out agenda alongside Key’s corporatisation of Auckland local government by handing over 75% of the city’s operations and assets to hand picked commercial boards, and it is pretty easy to see what National-ACT are doing to local government.
The bill contains a number of other elements we’ll be considering closely in the coming days: reducing councils’ obligations to consult the community, some requirement to focus on so-called core services (although most of Hide’s nutty core services and mandatory referenda ideas did not get through Cabinet), financial transparency and pre-election reporting. The bill could get its first reading as early as Tuesday.
I think they’re taking the spin a tad too far
It is hard to see how these actions could not add up to a privatisation agenda.
It’s the hypocrisy that goads me. I thought ACT was about the rights of ownership? In this case the ownership of the municipal water infrastructure resides in the hands of the people who paid for it, the various communities of ratepayers. This bill is designed to rob them. I thought ACT claimed to stand for the individual, but what can the individual do when 75% of City operations and assets are taken from them and given into the control of unelected commercial boards.
I guess that doesn’t matter, Auckland is being prepared for a infrastructure fire sale, all because some text book written in the 80s claims it’s a good idea.
Hide will want what is happening in Auckland today to happen to the rest of us tomorrow.
One time we paid for electricity. Now we pay for electricity,huge profits,huge CEO salaries and for upgrades and improvements. Now we pay twice as much as we did before.
Now water is being turned into a cash-cow for a bunch of greedy boys.
Water,and any profits from its gathering,belong to the people who own it,the people of New Zealand.
Hands off our water,Hide.
This is yet another blatant move to disempower, disenfranchise and impoverish the people.
Get angry folks, get very very angry.
Well marsman, under Hide’s model if you choose to live without water, you could save a fortune. Die a richer man/woman/child.
You’re right marsman: Hands off our water!
The new plan for Auckland calls for the moratorium on selling its assets to be removed BETWEEN Local elections. Coincidence?
Q : How can you tell if Rodney Hide is lying ?
A : His lips are moving….
LOL
Interesting times indeed. So in CHCH where we have no water treatment plan, Rodney and his mates will build and own and operate and charge for water purification, for us to drink the water that is going to be contaminated so much that we can’t drink it, because of Rodney and his mates’ bill getting rid of ECan for 3 and a half years.
So not only will we have no say in our land/water use but we’ll have to pay to have access to clean water. Good planning on Rodney’s part, wonder who is going to get rich out of this?
Good planning on Rodney’s part, wonder who is going to get rich out of this?
Not you, not me.
Hmmm, on an unconnected note, I wonder what large companies would be listed as donating to the ACT party if New Zealand had tighter electoral donation disclosure requirements?
This from the Right to Water group:
“This is the most common form of water privatisation in the world. Water privatisation of this type has led to increased costs, loss of accountability and environmental damage,” said Right to Water spokesperson, Maria McMillan.
“The government is claiming that this isn’t about privatisation which is utterly dishonest,” said Ms McMillan.
“These amendments are happening in a context of a vast global private water industry that has made billions of dollars through exactly these types of arrangements. And, throughout the world, these arrangements are described as privatisation,” she said.
http://www.scoop.co.nz/stories/PO1004/S00397.htm
Cochabamba and Bechtel, anybody?
Please keep the water in our own hands for our own mouths
Please don’t let the water being cashed up and end up in others’ wallets while we pay and pay and thirst
If future wars will be waged over water
Please let not the war be between the powerful and rich elites against the common people
Why thirty five years? Is this the expected life of the infrastructure which will be gifted back to the community to clean-up or renew?
I don’t know the answer, but it’s a good question. What will happen to the infrastructure after thirty five years? Who will own it? Who will be responsible for its upkeep or its removal?
Private companies can easily disappear or default, leaving the community to own the end problem. Like mines, like tanalising timber plants….
… or ask for bail-outs
and future Governments might have to re-nationalise (!!)
surely this has been a path well trodden from experience
and should be avoided
Let the pipes run down and rust just like the rail, they profit, it begins to fail, we force a buy back, they profit some more, then we have to spend to upgrade it back to scratch. Rinse and repeat.
But you are all wrong, no one is funding Rodney Hide, not even big business will touch them with a barge pole.
Rodney doesn’t need funding, you can see him for miles in his yellow blazer.
As Mr Mark Solomon Said tonight
This debate will not go away
Private – Public enterprise will be very good for NZ, whether the private group is the Maori Iwis or a Business
It looked like one of the radio stations had a mic at the lecture this evening so see if you can have a listen
Given I rarely have time to scratch myself at present, I will give you in quick time the conclusion of my decade+ plus studies of international banking and commerce(click Iain Parker at top of post for irrefutable supporting evidence)
At the core of international banking sit private incorporated investment banks that have decieved their way into gaining control of the issuance of much of the worlds monetary base as interest bearing credit. They repeatedly, in a process termed Predatory Lending, loan out more created credit than their is the physical resources to ever be converted to a means of repayment. The proceeds from the ever mounting compounding interest they then use to cross-own controlling stakeholdings in most every investment market.
They remain invested whilst share prices rise on debt fueled bubbles, they with repeated miraculous timing sell down their holdings, normally to pooled investment funds of the common folk, upon the advise of ratings agencies to which they also have affiliations, just before the mathematically unavoidable debt repayment crisis occurs, they then hold debt to borrowers heads like a gun, forcing them to sell their assets to their pet transnational corporations, at which stage they buy back in at mega cheaper prices, keeping what they skimmed, or they force governments, local and national, to enter into Private Public Partnerships of their necessities of life on terms mega favourable to the private partner, terms that always see the profits privatised and the losses socialised.
The public by the fact that the asset is a necessity of life is trapped as a longterm stakeholder for good, but the banking/corporate complex are only interested in extracting capital gain by driving up the share price of the parent corporate in line with predatory lending cycles described above. They orchestrate portrayed profit to boost listed shareprice by either ecumbering the PPP entity with hidden debt or by reducing staff and maintanence of the infrastructure, or both, then before the thing gets exposed for the gear box full of bananas that it has become, they sell out, normally to a common folks pooled investment fund upon the dud advise of affiliated rating agencies, then the govt has a choice, borrow more to fix up your necesity of life or go without it, or it could of course take back its sovereign right to spend its own public credit into circulation, without interest attached, to unlock its own labour and resources, to build its own public infrastructure, thus reducing the impact of the cost of foreign private banking created credit, with compounding interest attached, upon our cost of living down the food chain by two thirds odd.
The International Labour Movement were founded at the turn of the 20th century on the ideals of reforming the private monopoly of the issuance of the money supply they knew then, as it still is today, that it is the common denominator in the destruction of social cohesion.
The link I provide below is from a Greens idealist site, I am affiliated to no political party in this nation whilst they ignore the obvious, Public Credit would deliver the Green movement every justice they seek, yet, although I am told they have a large Public Credit contingent, they remain coward behind a private banker brainwashed executive. Labour could attract these voters to the cause if they returned to their much needed founding ideals.
http://www.greeniacs.com/GreeniacsArticles/Water-Privatization.html
Just before I hear the screams of, but you stood for the Democrats for Social Credit in the last election, I have since resigned from the DSC, for the very same reason that although John A Lee and Frank Langstone were both Public Creditors in the First NZ Labour Government of 1935, they had differing views on just how Public Credit should be issued into circulation. John A Lee believed it must be ensured that it is issued in a non-inflationary productive fashion, backed by using it to build public infrastructure assets. Langstone believed it should be issued as CH Douglas, who led a denomination of Public Credit, known as Social Credit, suggested in simply working out the gap between what is able to be produced and the shortfall in current purchasing power and then issuing the gap as Public Credit in the form of a national dividend, the opposition to this saying that large issuances to the public at large will be inflationary and quite probably end up disproportionately back in the hands of the few who will once again charge usurous rates to loan it back to those that gave it back to the sophisticated without foresight or insight, thus equal economic opportunity sought would not be obtained.
Even when the Social Credit Party was at its height of popularity it had these factions in it, Bruce Beetham was a national dividend man. Sadly the DSC are the only NZ party with an official Public Credit ideal, but even more sadly the divisions within it on just how Public Credit should be issued remain, in my opinion, so divided that the party way forward is impeded by stalemate.
Having studied the occasions in many nations that Public Credit has been used, I believe the historical evidence falls on the side of John A Lee. The difference I would compare to the inflationary Zimbabwe style issuance of Public Credit done wrong as national dividend, compared to the very non-inflationary issuances that have occured in US, Canada, Australia, NZ where it was spent into circulation to unlock labour and resources to create public infrastructure the value of which would make it honest money and they asset reduce the cost of living, at the same time increasing the standard of it.
Even sadder for me, I wonder how many could be bothered to read what I just wrote?
Getting a PPP to build some infrastructure for you is not privatisation as it is not the sale of an existing public asset. The reverse in fact will happen at the end of the PPP when the asset is taken over by the public body.
Obviously PPPs are not going to be possible if an existing law forbids private ownership of any assets but that is not the same thing as privatising (selling) existing assets.
There was no actual need for Labour to buy out Toll Rail in 2008, it was a desperate election year vote buy gamble that failed.
Mr Parker,
The overarching, inalienable, absolutely unquestionable prerogative of what can happen on this site is the right of the owners, and within that, the inalienable, absolutely unquestionable prerogative of readers’ responses to posted content is theirs alone to determine.
If there has not been much of or any response to your postings, I do suggest to you that questioning the intelligence of posters is not the right way to address it.
Agreed Iain. The banking system has been a fraud for centuries and, from what I can make out, the only reason why we’re keeping it is habit. Either that or this article from the Exiled is true, which it certainly could be, and the reason is actually fear.
Come off it Swampy,
History of NZ railways here:
http://www.stuff.co.nz/national/403393
Anything that see’s the profit from the use of a strategic asset, especially a necesity of life like water, transfer into private account is no less than privitisation, and if that monies transfers overseas it contributes negatively to the balance of payments
By the way whats your real name and work history, you may have posted it in the past, but I haven’t been around these parts long, I’m sure you won’t be ashamed of your background and are no doubt well up for some robust factual debate.
We should have never borrowed the foreign bankers created credit that we did back in the day of Vogels to build the one of the worlds most expensive elaborate rail vision in a land the least suited to it.
Back to modern times, at a time when a Public Service Sector Union that contained 25% of the workforce, including rail, were that powerful they could pretty much dictate who gained power, they would make regular outrages wage rise claims that any party that sought power couldn’t refuse, thus borrowed heavily to award, starting wage price spiral. At same time when hit by 69 and 73 odd(from memory)oil shocks we started borrowing heavily to subsidise agriculture, this all contributed heavily to the second time, first 1961, we were put into receivership at the hands of our international creditors in 1984.
In was in this forced sale of assets, 1984-99, to address our debt repayment crisis that our rail assets were first sold into private ownership. It was under this ownership that the assets were asset stripped by way of encumbering the listed entity with hidden debt, reducing maintanence and portraying the savings as increased profits to drive up the share price before selling out under well publicised dubious circumstances before the gear box full off bananas was exposed.
Much of the branch lines should never have been bothered with, but some of the mainlines are viable goodsense and what I would deem a strategic asset. Toll first negotiated a PPP with Labour, but as per corporate MO, started to renege once the change over was complete, as they do because they know just how much of an expensive hassle it is to change again, they started haggling over the incrementally increasing track lease arrangements, threatening to shut down lines that would have disrupted our economy, thus it was suffer their strong arm tactics or pay them a premium to get out. Only mistake we are going to continue to make now is to continue to borrow the created credit of foreign private incorporated investment banks at interest to fix it up after the corporate abuse, when we could be issuing our own without interest to fix it.
There comes a point where you have to back yourself. I put ten+ years of very intense research into ensuring I was as fully financially literate as any commissioned economist before I put my head above the parapet.
No doubt my style will, hopefully, more interest the more serious student of economic history, but somethings of such importance simply cant be done in bumper sticker length.
I do admit I am perhaps a grumpier and less patient person than before my innocent perception of NZ was shattered when I comprehended that NZ could harbour such nasty customers as anywhere else.
Infact, twice in my studies I was that sure I was wrong, I went back to the beginning and went wider and deeper, searching out the irrefutable evidence from the very mouths of the major players, Im far from happy my suspicions were proven right. Quite often wish I had remained blissfully ignorant, but now I know I simply can’t standby and not try and impede what these people have planned for my kids.
It should be noted that twice our public sector debt was reduced to near zero from the sale of assets to address debt repayment crisis, we even had a wee period of surpluses with the bit left for a while, we were told it would never happen again, yet, off she goes again, today we are steering down the barrel once more.
I’m going to bed or I will be testing my lovely wifes patience once more.
Hi,
Why does NZ wants to privatize its water? Is the current system not efficient enough?
Cheers
Some of this posts might be interesting:
http://indolaw.alafghani.info/search/label/privatization
Have a look also at the PSP/PPP and UN Right to Water page:
http://www2.ohchr.org/english/issues/water/iexpert/written_contributions.htm
@ Loota some things bear repeating
“Let the pipes run down and rust just like the rail, they profit, it begins to fail, we force a buy back, they profit some more, then we have to spend to upgrade it back to scratch. Rinse and repeat.”
We can learn from history but will we?
Hi Tracey, its interesting because this pattern of history seems obvious to me even as a casual observer.
The only answer I can think of to your question will we learn (and implied, why have we not, yet): the public haven’t had the repeating pattern presented to them in a way which is accessible and obvious. Pro-privatisers obfuscate the issue with business sounding concepts like private sector “efficiency”, “effectiveness”, “delivering value”, etc. which usually bear little relevance to the usual outcomes. Meanwhile, decision makers in the political arena are too caught up in complex detail/theoretical arguments/pursuit of two dimensional ideology/bad public sector advice to see the wood for the trees.
As an aside, I’ve heard people bring up the example of Telecom as it was under the old post office as an example of how a publicly run operation became so much more efficient and effective after privatisation. The thing is, public sector managers can reduce headcount, increase efficiency and manage to performance targets using the exact same processes, management techniques and determination that private sector managers can. They simply need good leadership and backing from the people they answer to: which is no different than in the private sector.
Telecom is also an example of an organisation, which once privatised, had no interest in capital expenditure. One of the reasons (an dI know I am simplifying) the taxpayer has to pay 1.5 billion to Telecom to achieve greater braodband.
As for why we dont learn. Who is going to present it the way you have? The problem is the two main parties, now more are joining, have ALL ignored this histiry. Labour started the big privatisation (and stll carries that baggage, rightly or wrongly) and National dabbles every time they have power. Neither is going to want to list the flaws with concrete examples.
perhaps this is Labour’s opportunity. To throw up someone amongst them who is new, allow them to even scold labour for its part in this in the past, read out your list, and others examples like a litany of our admitted failures and vow to not do it again…
It cant be Goff because he is VERY tarred by the privatisation brush and too many will see his contrition as hollow, no matter how well intended.
In my opinion.
I’d like to hear Max Bradfords name used more in all these arguments. His great experiment failed, and now one his juniors (Brownlee) is neck deep in more ideas of a similar ilk…
Tracey said:
I’m really not sure about this aspect of politics. Someone screws up 20 years ago and it remains a ball and chain forever. In the private sector, if you are involved in a massively failed project, there is quite a good chance that you’ll get a promotion and be asked to serve again – why? Because you will (hopefully, if sufficiently talented) be able to bring all the learning lessons, reflections and experience with you to your new role. (You can always tell those old dogs who will never learn new tricks though). And true performance failures who are going to be an ongoing liability to the organisation are identified early and cut loose, regardless of their friends, loyalty and history with the organisation. Heartless perhaps, but the ability of the organisation to perform for its stakeholders is first and foremost, not its ability to act as a sanctuary for non performers.
Another positive thing in the private sector – there is no need to constantly look backwards and relitigate past failures. I’ll use Apple Computer as an example here. For the last 5 years they have been on a huge winning streak. Does anybody look back at the boneheaded fail products like the Apple Lisa, Macintosh TV, Apple Newton, etc.? Nope – because it is your current performance and future prospects which count, and your ability to meet and shape the new demands of a new day.
What did happen though is exactly as you described – failures were freely admitted and failed approaches/people jettisoned without a second thought.
As someone who’s been there I can assure you that Telecom became less effective and efficient after privatisation. All the supposed benefits were solely due to improvements in technology which were mostly put in while it was still state owned and would have happened regardless. Since privatisation the amount of their income that Telecom has put back into the network has decreased from 100% back in the 1980s to less than 20% now.
Come now Draco, that is NOT what we want people to hear. It’ll ruin the consistent story we want to put out to the public. Privatisation or BUST!!!!!
Privitising water?, the one true commodity that wars are going to be fought over in the coming decades.
Maybe this makes sense, if we dont have have control of our water and another country wants it that can just bye out the conpanys who control the water and not have to bother invading.
Yes i am being serious, soon water will be as big a commodity as oil.
http://www.helium.com/items/474930-looming-water-shortage-creates-potential-for-international-war
@Loota LOL
@Waterboy – isn’t it scary how it is in the hands of big business.
As far as rail goes there are the pro rail people who hark back to the glory days when everything went by rail. And there are the realists who see that we now have roads and rubber tyred vehicles that can move stuff everywhere.
Also in the picture is a large union with very substantial financial assets which claims 100% coverage of the rail sector which just happens to be one of only three unions affiliated with the Labour Party.
Also in the frame are yours and mine higher electricity prices (nearly 100% rise in the past 8 years) which was used to fund this silly buy back from taking special dividends out of the Government owned power companies.
Because the operating assets that Labour paid so handsomely for are only worth less than half of the price paid for them.
S wampy, some of us like both
@Loota May 1 10:20
Are you so sure you want to use Apple Computer as an example? Now that they are turning nasty and squashing their competitors?
Now what was the name of that other big company that does that? Perhaps you have some idea now of where they are heading for?
Well Swampy, I reckon that its always nicer to have ownership and influence over the big players in any industry and help direct the stomping. (Instead of being on the receiving end of it!)
Doing sharp business and staying on top of the heap is not necessarily the same thing as being nice to the other competitors on the field. Yes I accept that’s the way the game is.
I should add, that many of the fastest growing and richest economies in the world just love rail. I daresay China is not planning to extend its high speed rail (HSR) network right into the heart of Europe covering 17 countries in a massive industrial expansion plan for the sake of old railways nostalgia and being green.
http://cleantechnica.com/2010/03/13/china-wants-to-connect-its-high-speed-rail-to-europe-largest-infrastructure-project-in-history/
Plenty of mistakes have been made in history of rail in NZ, but, it has been acentuated by where it comes from and cost of the credit/money to build it, Swampy the sooner you understand that 97% of money incirculation in NZ enters circulation as compound interest bearing debt owed to the banking network, the sooner you will realise that the so-called freemarket is not free, but currently rigged from top to bottom.
Swampy’s
http://blog.labour.org.nz/index.php/2010/04/30/when-is-water-privatisation-not-water-privatisation/comment-page-1/#comment-50729
Mine in reply
http://blog.labour.org.nz/index.php/2010/04/30/when-is-water-privatisation-not-water-privatisation/comment-page-1/#comment-50729
I agree the Unions abuse of power at times has contributed to the breakdown of social cohesion we are witnessing and their actions at times has been disgusting, all most completely destroying their credibility, but unfortunately you can also find at the core of that, like most things, an exploitive greedy few that have infiltrated something intended for good and converted it into a commercial pyramid scam that favours an insider few and abuses the trust of not fully informed few.
not fully informed many that is mean’t to be of course.
Would be great to have an edit function?
C’mon Swampy – roads in NZ are a joke now. Rubber tyres? The problem is not the tyre or the mode of vehicle per se it’s how many have to own a car or two in this country. The answer to efficiently moving people around cannot be “raods” because it’s barely working now.
1pm Auckland, motorway between Mt Wellington and Gillies Ave moving north. Bumper to bumper, not an accident in sight. It’s gridlock baby and more roads wont make a blind bit of difference. EVERY new roading project in Aucklandin the last ten years has opened AT capacity, so it already needs expansion when it completes.
the world bank is paying government to do this
http://www.globalpolicy.org/component/content/article/209/43398.html
what i’d like to know is, if you dont pay your water bill, can they turn off your water? that sounds like a breach of human rights
I completely agree with Mr Parker. We have an incredible and yet factual scenario where we are beholden to offshore banks for the function of our monetary system. This is a system that is designed from its very blueprints, to eventually bring about a managed bankrupsy and looting of our resources, both human and natural. It is an imperial model of the British Empire that came from the Venitians before them. This is the one huge lever of power that is being used to create a global state under a banker dictatorship. The Chinese know it and they have taken some steps to stay out of its grip but there are enough credible experts around the world who tell it like it is. To name a few are Bob Chapman, Max Keiser, Webster Tarpley, Lyndon Larouche, Gerald Celente, Jim Rogers and the list goes on.
They have created a Derivatives bubble that cannot be paid off. There is around 500 plus Trillion in debt just floating around the system and its amazing that the who thing has not crashed already.
As for water, check out Bechtel’s methods in South America and that should give you some idea of what we might face in the future. These people do not care about us one bit. They care about control and power. If they can control the basic needs of humans then what more control do they need.
This has moved past right and wrong. This is the battle for our very survival.